Indian bourses trade under selling pressure

Indian bourses were trading under selling pressure in late afternoon session, on the back of sustained selling activities by market-participants amid weak global cues. HDFC Bank, Hindustan Unilever and Kotak Mahindra Bank witnessed notable losses. Traders failed to get any sense of relief with the Ministry of Commerce and Industry’s statement that foreign direct investment (FDI) inflows from April to November 2020 have increased by 22 percent (YoY) to $58.37 billion - the highest for the first 8 months of any fiscal. Apart from this, the FDI equity inflows received during April-November 2020, rose by 37 percent (Y-o-Y) to $43.85 billion. On the sectoral front, Fertiliser sector remained in focus, as rating agency ICRA in its latest report has said that fertiliser volume growth is expected to be strong in the current financial year (FY21) with a strong kharif production and healthy reservoir levels leading to record rabi sowing levels. On the global front, all Asian markets were trading lower as investors reacted to a worsening Covid-19 health crisis and a downbeat economic outlook from the Federal Reserve. European markets were trading lower following Wall Street’s worst sell-off since October on concerns about high valuations, with investors also growing wary about a rise in more contagious coronavirus variants.

The BSE Sensex is currently trading at 46815.45, down by 594.48 points or 1.25% after trading in a range of 46518.48 and 47172.02. There were 5 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.55%, while Small cap index down by 0.56%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.59%, Telecom up by 0.32%, Consumer Durables up by 0.25% while, Realty down by 2.23%, IT down by 1.61%, FMCG down by 1.58%, TECK down by 1.33%, Healthcare down by 1.12% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.54%, SBI up by 1.54%, Ultratech Cement up by 0.58%, Titan Co up by 0.58% and ONGC up by 0.56%. On the flip side, HDFC Bank down by 3.81%, Hindustan Unilever down by 3.15%, Kotak Mahindra Bank down by 2.90%, Maruti Suzuki down by 2.87% and Power Grid Corpn. down by 2.65% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that fertiliser volume growth is expected to be strong in the current financial year (FY21) with a strong kharif production and healthy reservoir levels leading to record rabi sowing levels. It noted that the government support during the summer season led to strong kharif production and healthy reservoir levels resulted in rabi sowing levels reaching 67.5 million hectare as on January 22, 2021. Therefore, it said the rabi sowing and the production is expected to be strong, which bodes well for fertiliser sales.

According to the report, fertiliser sales volume have witnessed a growth of 12 percent year-on-year in the first nine months of 2020-21. It was driven by a 9 percent increase in urea, 11 percent rise in di-ammonium phosphate (DAP), 19 percent jump in complex fertilisers (NPK), 29 percent in muriate of potash (MOP) and a 12 percent in single super phosphate (SSP). With the fourth quarter being the placement season for the upcoming kharif season, ICRA expects the full-year fertiliser sales to witness a growth of 10 per cent year-on-year as the primary sales tend to be slower in the fourth quarter.

The report further said that the retail sales also witnessed strong growth in FY21, resulting in low systemic inventory levels for the industry during major parts of the year leading to lower working capital requirement for the sector. It added that additionally, with faster retail sales, the receivables from the market had a shorter cycle and the industry was able to claim subsidy at a faster pace from the government, leading to faster subsidy realisation of previous years.

The CNX Nifty is currently trading at 13802.15, down by 165.35 points or 1.18% after trading in a range of 13713.25 and 13898.25. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.53%, SBI up by 1.52%, Hero MotoCorp up by 1.39%, Indian Oil up by 1.26% and JSW Steel up by 0.94%. On the flip side, HDFC Bank down by 3.89%, Wipro down by 3.44%, Hindustan Unilever down by 3.19%, Kotak Mahindra Bank down by 3.03% and Maruti Suzuki down by 2.59% were the top losers.

All Asian markets were trading lower; Hang Seng decreased 746.76 points or 2.55% to 28,550.77, Nikkei 225 slipped 437.79 points or 1.53% to 28,197.42, Taiwan Weighted dropped 285.57 points or 1.82% to 15,415.88, Jakarta Composite lost 129.78 points or 2.12% to 5,979.39, Shanghai Composite declined 68.16 points or 1.91% to 3,505.18, KOSPI fell 53.51 points or 1.71% to 3,069.05 and Straits Times was down by 34.67 points or 1.17% to 2,923.96.

European markets were trading lower; UK’s FTSE 100 decreased 61.10 points or 0.93% to 6,506.27, France’s CAC decreased 40.73 points or 0.75% to 5,418.89 and Germany’s DAX was down by 171.90 points or 1.26% to 13,448.56.